<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
(AMENDMENT NO. 10)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
----------------
MAGMA POWER COMPANY
(Name of Subject Company)
MAGMA POWER COMPANY
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.10 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
0005591941
(CUSIP number of Class of Securities)
JON R. PEELE, ESQ.
Executive Vice President, Secretary and General Counsel
MAGMA POWER COMPANY
4365 EXECUTIVE DRIVE, SUITE 900
SAN DIEGO, CALIFORNIA 92121
(619) 622-7800
(Name, address and telephone number of person authorized to receive notice and
communications on behalf of the person(s) filing statement)
Copies to:
<TABLE>
<S> <C>
Michael J. Kennedy, Esq. David W. Heleniak, Esq.
SHEARMAN & STERLING SHEARMAN & STERLING
555 California Street 599 Lexington Avenue
San Francisco, California 94104 New York, New York 10022
(415) 616-1100 (212) 848-4000
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
This Amendment No. 10 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9, dated October 11, 1994, as amended (the "Schedule
14D-9"), filed by Magma Power Company, a Nevada corporation ("Magma" or the
"Company"), relating to the tender offer disclosed in a Tender Offer Statement
on Schedule 14D-1, dated October 6, 1994, as amended and supplemented through
the date hereof, of CE Acquisition Company, Inc., a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of California Energy Company, Inc.,
a Delaware corporation ("California Energy"), to purchase 12,400,000 Shares at
a price of $38.50 per Share net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated October 6,
1994, as supplemented on October 26, 1994, and as amended through the date
hereof, and the related Letter of Transmittal as amended and supplemented
through the date hereof (the "Revised Offer"). Capitalized terms used and not
defined herein shall have the meanings sets forth in the Schedule 14D-9.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 is hereby amended and supplemented by adding thereto the following:
Exhibit 31 -- Letter to Stockholders, dated November 16, 1994.
2
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
MAGMA POWER COMPANY
By: /s/ Jon R. Peele
___________________________________
Name: Jon R. Peele
Title: Executive Vice President,
Secretary and General
Counsel
Dated: November 16, 1994
3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
PAGE
EXHIBITS DESCRIPTION NUMBER
-------- ----------- ----------
<C> <S> <C>
Exhibit 31 --Letter to Stockholders, dated November 16, 1994
</TABLE>
<PAGE>
[LETTERHEAD OF MAGMA POWER COMPANY]
November 16, 1994
Dear Fellow Magma Stockholder:
As you know, California Energy Company has made a tender offer for 51% of
Magma's outstanding shares and is soliciting your consent to a special meeting
of Magma stockholders. If this special meeting is called, California Energy
will seek election of its hand-picked slate of four new directors to an
enlarged Magma Board and approval of by-law amendments that would attempt to
give California Energy's nominees, if elected, the right to block various
fundamental corporate actions by Magma.
You should know that through the consent solicitation and proxy process,
CALIFORNIA ENERGY HAS INDICATED THAT IT INTENDS, FOLLOWING THE NEXT ANNUAL
- --------------------------------------------------------------------------
MEETING OF MAGMA'S STOCKHOLDERS, TO GAIN CONTROL OF YOUR COMPANY WITHOUT BUYING
- -------------------------------------------------------------------------------
A SINGLE SHARE OF MAGMA STOCK. Your Board has unanimously recommended that you
- ------------------------------
reject California Energy's coercive and highly conditional tender offer for the
reasons set forth in the Schedule 14D-9 previously delivered to you. These
reasons included the opinion of Magma's financial advisor, Goldman Sachs, that
the consideration offered pursuant to the California Energy offer is inadequate
and the fact that California Energy's financing is subject to numerous
conditions, including the satisfactory completion by California Energy's
financing sources of due diligence on both Magma and California Energy.
---
Apparently, the three week period since the delivery of financing commitment
letters has not been long enough for California Energy's lenders to become
comfortable with California Energy.
Currently, your Board, with the assistance of Goldman Sachs, is actively
exploring all alternatives in an effort to ensure the best possible result for
Magma's stockholders. These efforts have included requesting due diligence on
California Energy and to meet with California Energy regarding California
Energy. California Energy has declined these requests. In the meantime, it is
not in your interest to participate in California Energy's consent
solicitation, which will only further California Energy's plan to acquire Magma
at the lowest possible price. Although California Energy would have you believe
that merely calling a special meeting can do no harm, the prospect of
California Energy gaining control of Magma through the proxy process may have a
CHILLING EFFECT ON OTHER PROSPECTIVE PARTNERS OF OR BIDDERS FOR MAGMA.
Furthermore, if California Energy believes that it can gain control of the
Magma Board through the proxy process, it will have NO INCENTIVE TO INCREASE
ITS TENDER OFFER.
WHETHER OR NOT YOU ARE ENTICED BY CALIFORNIA ENERGY'S TENDER OFFER, YOU
SHOULD NOT SEND IN THE GREEN CARDS YOU HAVE RECEIVED OR MAY RECEIVE FROM
--- -----
CALIFORNIA ENERGY. If California Energy gets into Magma's Boardroom, it will
only serve its interests, not yours. Your Board is in the process of seeking
out and evaluating alternatives that would be in the best interests of ALL
MAGMA STOCKHOLDERS rather than in the best interests of California Energy.
<PAGE>
2
Your interests and California Energy's are diametrically opposed: CALIFORNIA
ENERGY IS SEEKING TO BUY MAGMA AT THE LOWEST POSSIBLE PRICE THROUGH PRESSURE
TACTICS SUCH AS THE CALL SOLICITATION. You should not sign any solicitation
card sent by California Energy nor should you tender your shares to California
Energy's hostile, highly conditional offer.
We will be mailing an opposition solicitation statement and GOLD opposition
card to you shortly. THE GOLD CARDS TO BE FURNISHED TO YOU BY YOUR BOARD WILL
ENSURE THAT CALIFORNIA ENERGY NEVER GETS INTO MAGMA'S BOARDROOM AND THE
COLLECTIVE BEST INTERESTS OF MAGMA'S STOCKHOLDERS ARE SERVED. IF YOU HAVE
ALREADY SIGNED AND RETURNED A GREEN CARD, WE URGE YOU TO SIGN AND RETURN THE
GOLD CARD YOU WILL RECEIVE TO REVOKE YOUR REQUEST OF A SPECIAL MEETING.
We appreciate your continued support and patience throughout this difficult
and complex process.
Sincerely,
Paul M. Pankratz Ralph W. Boeker
Chairman President and Chief Executive
Officer
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
If you have any questions, or need assistance in voting your shares, please
contact the firm assisting us in the solicitation of opposition cards:
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
TOLL FREE: 1-800-223-2064
If your shares of Common Stock are held in the name of a bank or brokerage
firm, only that firm can execute a GOLD CARD on your behalf. Please contact the
person responsible for your account and give instructions for a GOLD CARD to be
voted for you.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
3
# # #
The following information is provided pursuant to Section 14(a) of the
Securities Exchange Act of 1934, as amended, and Rule 14a-11(b)(2) thereto. The
participants in the solicitation are Magma Power Company, the following
directors and others, who in the aggregate are deemed to beneficially own
approximately 2.1% of the outstanding common shares of Magma common stock:
James D. Shepard, Paul M. Pankratz, Thomas C. Hinrichs, Ralph W. Boeker, Louis
A. Simpson, John D. Roach, Roger L. Kesseler, Lester L. Coleman, Williams R.
Knee, Bent Petersen, and J. Pedro Reinhard, and Jon R. Peele, Wallace C.
Dieckmann, Kenneth J. Kerr, and Trond Aschehoug. No participant individually
owns more than 1% of the outstanding shares of Magma's common stock. Messrs.
Kesseler, Knee and Reinhard are employees of The Dow Chemical Company ("Dow").
Dow is the beneficial owner of 5,032,430 shares of Magma's common stock of
which 4,000,005 shares are held in escrow to satisfy certain exchange rights
under an existing Dow note indenture. Dow retains the right to vote the shares
placed in escrow. In addition, the Company is a party to a technical services
agreement with Dow pursuant to which the Company has made payments for
technical services in the amounts of $575,000 for 1993 and has agreed to make
payments of $550,000 for 1994 and thereafter in annual amounts reduced by
$50,000 each year to $300,000 for 1999. The Company is also a party to an
engineering and construction management services agreement with Dow Engineering
Company. The Company believes that the technical services agreement and the
engineering and construction management services agreement are on terms at
least as favorable to the Company as would be available from an unaffiliated
third party. Mr. Shepard is a co-trustee of the B.C. McCabe Foundation, which
beneficially owns 2,752,641 shares of Magma's common stock. Mr. Shepard
disclaims beneficial ownership of such shares.
